Steady Growth of China's Economy

In sharp contrast with the capitalist world's deepening economic crisis, China's socialist economy has been steadily growing and at a comparatively high speed. This is the result off adhering to the policy of independence and self-reliance.

IN the 26 years since the founding of the People's Republic of China, agriculture has developed very quickly, with rich harvests 13 years in a row. Total grain output in 1974 was 2.4 times that in 1949. Industry has also grown rapidly, with 195 per cent increase in total output value in the ten years between 1964 and 1974. There were big rises in output of major products during that period; steel 120 per cent, petroleum 660 per cent, coal 92 per cent, electric power 200 per cent, chemical fertilizer 350 per cent, tractors 540 per cent and cotton yarn 85.8 per cent. The high speed development of the national economy has greatly accelerated the pace of socialist construction. China has already successfully fulfilled three Five-Year Plans for the development of the national economy and will triumphantly fulfil its Fourth Five-Year Plan by the end of this year. Financially and economically, China was controlled by the imperialist powers 26 years ago. Today, socialist New China has no external debt or foreign investment, and foreign enterprises are things of the past. While the purchasing power of money has declined in the capitalist world, China has maintained the stability of its currency, the Renminbi. The people lead a better life than before and all able-bodied adults have regular work. Bank deposits have increased yearly in both city and countryside, with a 12.5 per cent rise in 1974 over the previous year.

As a whole, the economy is vigorous and thriving. The rapid and steady economic growth in the past quarter of a century is due to the fact that the working class and other working people in China have adhered to the policy of "maintaining independence and keeping the initiative in our own hands and relying on our own efforts."Agriculture put in first place. Agriculture is the foundation and China has given it first place in developing the national economy. The state makes large allocations every year for agricultural production which has developed at a fast pace in the past two decades and more. Annual grain output is over 250 million tons and the output of major industrial crops have gone up from several times to over a dozen times in the same period, thus providing sufficient grain, raw materials, labour force, funds and a growing market for the development of light and heavy industry. On the basis of the steady development of agriculture, light industry has also grown at a high speed. Output of major light industrial products has moved ahead several and even dozens of times in the past 26 years, and varieties, designs and patterns have kept on multiplying. Light industry plays an important role in catering to the needs of the people in their daily lives and in promoting market prosperity. As it requires less capital investment and yields quicker results, light industry provides funds more rapidly for the development of agriculture and heavy industry. About a quarter of China's total investment funds today comes from light industry. Meanwhile, planned development of heavy industry provides increasing quantities of equipment and other means of production for developing agriculture, light industry, communications and transport, and heavy industry itself. Agricultural development has laid a solid foundation for promoting the growth of industry and the national economy as a whole, enabling them to develop at faster rates.

Wide and stable domestic market. A reason why China has been able to achieve steady and rapid economic growth is that it has a wide and stable domestic market. The socialist domestic market has great potentiality and is absorbing more and more heavy and light industrial products. Therefore it has provided great possibilities for the high speed development of the national economy. The country has developed its economy in a planned way according to the needs of construction and the people's livelihood; it arranges the market according to plan on the basis of rising production and purchasing power. In the last quarter of a century, the supply of commodities has kept up with the people's purchasing power while production and consumption have remained balanced. There is neither overproduction nor slump in China. With an eye to promoting production and improving the people's standards of living, the state arranges the market in a unified way and enforces rigid price control to keep prices stable. To speed farm production, consolidate and develop the socialist collective economy and strengthen the worker-peasant alliance, the state has on many occasions raised the purchasing price of agricultural and side-line products and reduced the selling price of the means of agricultural production as well as prices of industrial products like medicines and stationery. This has greatly narrowed the irrational "scissors" difference left over from the old society between prices for industrial and farm products. The present purchasing price of agricultural and sideline products is double that of 1950, while the selling price of the means of agricultural production, such as chemical fertilizers, pesticides and diesel oil, is one-third to two-thirds less than that of 1950. Simultaneous with the raising of the grain purchasing price, the selling price has been kept stable. The "scissors" difference between the prices of industrial and farm products has been narrowed 45 per cent as compared with 1950. Peasants now get a great deal more industrial products for the same amount of farm products. To ensure that domestic market prices are not influenced by price fluctuations on the international market, China has persisted in differentiating prices in domestic and foreign trade. She has cut the links between prices on the domestic and foreign markets by fixing different prices for each. Her independent and rational price adjustment has played a positive role in promoting industrial and farm production, improving the people's livelihood, narrowing the differences between workers and peasants and between town and countryside, consolidating the worker-peasant alliance, and strengthening unity among the different nationalities.

Planned and proportionate development. In developing the national economy, China aims to meet the growing needs of economic construction and the people's livelihood. From the central down to the basic level and from town to countryside, every production unit works according to a unified state plan calling for what products to be produced and the amount of production. Meanwhile, labour power and the means of production are distributed among the various branches of the national economy in a planned way and the distribution of the means of livelihood is controlled by the state. Planned and proportionate development of the economy in socialist New China has replaced capitalist free competition and anarchy. This has freed the country from economic crisis, an incurable disease of the capitalist system, and enabled it to use its manpower, materials and funds rationally.

Simultaneous development of big, medium-sized and small enterprises. China has adhered to the principle of building big, medium-sized and small enterprises simultaneously in the course of industrial development. This enables full use of local labour forces, funds and scattered resources, and leads to a rational distribution of the productive forces. Therefore, many factories are located close to where their raw materials are produced and their products consumed, which is beneficial to the integration of industry and agriculture. With the distribution of large, medium-sized and small industries all over the country, a solid socialist industrial base has been built. Today, every province, municipality and autonomous region has its own heavy industry and light industry, and most counties and a number of people's communes and production brigades have built their own small-scale industry. Many big and medium-sized cities have set up a great number of neighbourhood factories and workshops. This has evened out the distribution of industry, raised the rate of self-sufficiency in the supply of industrial products in various parts of the country and increased the speed of industrial development, thereby playing an important part in helping agriculture.

Fully exploiting domestic resources. An important factor in China's steady economic growth is the full use of domestic resources to expand production of raw materials. China is a socialist country. Therefore, it can never plunder the resources of other countries as is done by the imperialist and social-imperialist powers, nor can it depend on importing raw materials for the development of its economy; it can only use its own resources and expand production of raw materials by relying on its own efforts. Since the founding of the People's Republic, geological surveying has been carried out on a large scale and deposits of more than 100 kinds of minerals have been found. This provides a solid material basis for the production of raw materials. China has explored its deposits and developed the petroleum industry at a high speed. With the opening of the Taching, Shengli and Takang Oilfields, an average yearly increase of over 20 per cent has been registered by the industry since 1960. To accelerate the building of the metallurgical industry, great efforts have been made to open up mines and set up many big and medium-sized non-ferrous metal and iron-ore bases. Today, the basic minerals needed by the metallurgical industry are all self-supplied. The masses have been mobilised to locate deposits and open up mines in nine provinces south of the Yangtze River. As a result, a large number of new mines have been set up. The growth of agriculture and the metallurgical, coal and petrochemical industries has also provided a vaster source of raw materials for the light industry. China has built a solid foundation for its economic development by expanding raw materials self-reliantly, opening up new raw material sources, and building raw material producing bases according to plan. While the capitalist world grapples with fuel and raw material crises and declining production, China's national economy continues to advance in an all-round way and at a comparatively high speed.